Systemax Inc. (NYSE: SYX) today announced financial results for the fourth quarter and full year ended December 31, 2011.
|Performance Summary(U.S. dollars in millions, except per share data)|
|Highlights||Quarter EndedDecember 31,||Year Ended December 31,|
|Diluted earnings per share||$0.40||$0.34||$1.47||$1.13|
|Special (gains) charges, net||$0.6||$1.1||($5.6)||$4.3|
|Special (gains) charges, net, per diluted share, after tax||$0.01||$0.02||($0.10)||$0.07|
- Consolidated sales declined 3% to $978.8 million in U.S. dollars. On a constant currency basis, sales declined 2%.
- Business to business channel sales grew 9% to $514.0 million in U.S. dollars. On a constant currency basis, sales grew 10%.
- Consumer channel sales declined 13% to $464.8 million in U.S. dollars. On a constant currency basis, sales declined 13%.
- “Same store” business to business sales grew 7% and same store consumer sales declined 14% on a constant currency basis.
- Special charges incurred were approximately $0.6 million on a pre-tax basis, or $0.01 per diluted share after tax, consisting of legal and professional fees, related to the previously disclosed investigation and settlement with a former officer and director.
- Operating income increased 4% to $21.0 million.
- Diluted earnings per share (EPS) grew 18% to $0.40.
- Consolidated sales grew 3% to a record $3.7 billion in U.S. dollars. On a constant currency basis, sales grew 1%.
- Business to business channel sales grew 12% to $2.0 billion in U.S. dollars. On a constant currency basis, sales grew 10%.
- Consumer channel sales declined 7% to $1.7 billion in U.S. dollars. On a constant currency basis, sales declined 7%.
- The Company recorded special gains, net of legal and professional fees, of $5.6 million on a pre-tax basis, or approximately $0.10 per diluted share after tax, related to the previously disclosed investigation and settlement with a former officer and director.
- Operating income grew 17% to $80.5 million.
- Diluted EPS grew 30% to $1.47.
“In the second half of the year we launched a number of initiatives to strengthen our operations and improve our results. There is additional work to be done and this is a key focus area for our management team in the year ahead. To help facilitate these efforts we recently announced changes to our organizational structure with the appointment of Pim Dale as Chief Executive of the European Technology Products Group and the promotion of Bob Dooley to President of Global Industrial. With Pim and Bob joining David, Systemax has experienced and dedicated executives guiding our three largest business units. We believe this is the right management structure to meet the unique needs of each business and execute on our future growth initiatives. Combined with our solid core business model, web-centric focus and integrated multi-channel platform, we are well-positioned to create additional value for our shareholders.”
|Supplemental Channel Sales (in millions)|
|Channel||Quarter Ended December 31,||Year Ended December 31,|
|Business to business1||$514.0||53%||$472.3||47%||$1,985.2||54%||$1,770.2||49%|
|1||Includes sales from managed business relationships, including outbound call centers and extranets, and the entire Industrial Products and Corporate segments|
|2||Includes sales from retail stores, consumer websites, inbound call centers and television shopping|
|Supplemental “Same Store” Channel Growth1 – Q4 2011 vs. Q4 2010|
|Business to business||7%|
|1||Excludes revenue at retail stores, websites and call centers operating for less than 14 full months as of the beginning of the current comparison period and computed on a constant currency basis. The method of calculating comparable store and channel sales varies across the retail and direct marketing industry. As a result, Systemax’s method of calculating comparable sales may not be the same as other companies’ methods.|
|Supplemental Product Category Sales Summary (in millions)|
|Product Category||Quarter Ended December 31,||Year Ended December 31,|
|Computer accessories & software||$255.9||26%||$263.6||26%||$1,025.0||28%||$982.8||27%|
|Industrial products||$83.3||9%||$ 65.4||6%||$319.9||9%||$250.0||7%|
|Supplemental Business Unit Sales Summary (in millions)|
|Business Unit||Quarter Ended December 31,||Year Ended December 31,|
|Corporate and Other||$1.0||-%||$0.6||-%||$3.4||-%||$2.3||-%|
The Company’s effective tax rate for the fourth quarter was 25.4% compared to 31.1% in the fourth quarter of 2010. The effective tax rate for the year ended December 31, 2011 was 30.9% compared to 35.6% for the same period last year. The lower effective tax rate in 2011 is primarily the result of the company having a higher pre-tax income in France compared to the same period in 2010. The pre-tax income in France is partially offset by the use of net operating loss carryforwards that have a full valuation allowance applied.Earnings Conference Call Details Systemax Inc. will host a teleconference to discuss its fourth quarter and full year 2011 results today, February 28, 2012 at 5:00 p.m. Eastern Time. A live webcast of the teleconference will be available on the Company’s website at www.systemax.com in the investor relations section. The webcast will also be archived on www.systemax.com for approximately 90 days. About Systemax Inc. Systemax Inc. ( http://www.systemax.com), a Fortune 1000 company, sells personal computers, computer components and supplies, consumer electronics and industrial products through a system of branded e-Commerce websites, retail stores, relationship marketers and direct mail catalogs in North America and Europe. The primary brands are TigerDirect, CompUSA, Circuit City, MISCO, WStore and Global Industrial. Forward-Looking Statements This press release contains forward-looking statements about the Company’s performance. These statements are based on management’s estimates, assumptions and projections and are not guarantees of future performance. The Company assumes no obligation to update these statements. Actual results may differ materially from results expressed or implied in these statements as the result of risks, uncertainties and other factors including, but not limited to: (a) unanticipated variations in sales volume, (b) economic conditions and exchange rates, (c) actions by competitors, (d) the continuation of key vendor relationships, (e) the ability to maintain satisfactory loan agreements with lenders, (f) risks associated with the delivery of merchandise to customers utilizing common carriers, (g) the operation of the Company’s management information systems, and (h) unanticipated legal and administrative proceedings. Please refer to “Risk Factors” and the Forward Looking Statements sections contained in the Company’s Form 10-K for a more detailed explanation of the inherent limitations in such forward-looking statements.
|Condensed Consolidated Statements of Operations – Unaudited|
|(In thousands, except per share amounts)|
|Quarter Ended||Year Ended|
|December 31*||December 31*|
|Cost of sales||838,873||869,825||3,151,363||3,100,385|
|Selling, general and administrative expenses||118,330||115,112||455,747||416,570|
|Special (gains) charges, net||605||1,091||(5,598)||4,289|
|Interest and other (income) expense, net||1,325||1,672||1,844||2,712|
|Income before income taxes||19,637||18,472||78,683||66,033|
|Provision for income taxes||4,983||5,744||24,275||23,482|
|Effective tax rate||25.4%||31.1%||30.9%||35.6%|
|Net income per common share:|
|Weighted average common and common equivalent shares:|
|Condensed Consolidated Balance Sheets|
|December 31*||December 31*|
|Cash and cash equivalents||$97,254||$92,077|
|Accounts receivable, net||268,980||276,344|
|Prepaid expenses and other current assets||27,738||26,441|
|Total current assets||766,216||765,237|
|Property, plant and equipment, net||70,699||73,765|
|Goodwill, intangibles and other assets||52,747||55,098|
|Accounts payable and accrued expenses||408,960||461,710|
|Total current liabilities||411,512||464,365|
|Total liabilities and shareholders’ equity||$889,662||$894,100|